IREN — Fair-Value Anchored Capital Extraction

This case shows how long-dated capital extraction can protect you when you accidentally enter far above fair value. Here, IREN was purchased around $65.53 while your conservative fair value from Value-Trades was about $30.00 per share. Instead of just holding and hoping, you immediately moved the position into a deep ITM covered call project anchored near fair value.

You sold a deep ITM LEAP call with strike $35.00 (near fair value),
Collected a very large premium of $47.00 per share, and
Reduced your true economic risk to roughly $18.53 per share, well below your fair value estimate.

The result is a structure targeting roughly 88.88% total return on locked capital at expiry, which translates to about 34.11% annualized on this project alone — before counting any additional returns from redeploying the extracted float.

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Why this IREN extraction works

On entry, you owned 100 shares of IREN at $65.53, investing $6,553.00 in a name trading more than 2× above your fair value anchor of $30.00. Rather than sit exposed to a full down-cycle, you sold a deep in-the-money LEAP covered call:

Strike K = $35.00 (near fair value),
Premium P = $47.00 per share,
Effective sale price = K + P = $82.00 per share,
Economic locked capital (cost minus premium) = $18.53 per share.

Broker Cost Basis

$65.53 /sh
$6,553.00 total

Fair Value Anchor

~$30.00 /sh

Locked Capital (Economic)

$18.53 /sh
$1,853.00 total

Net Premium Kept

$47.00 /sh
$4,700.00 total

Protection vs simple buy & hold (today)

Scenario	P/L per share	P/L vs cost
Just hold from $65.53 → $40.00	$-25.53	-38.96%
Capital extraction path (K + P)	+$16.47	25.13%

Key idea: At a spot price of around $40.00, a simple holder is sitting on a sizeable drawdown, while the capital extraction structure is already locked into a positive outcome based on the contract math ($82.00 vs original $65.53). The volatility path between now and expiry matters much less than the strike + premium you engineered on day one.

Project return vs locked capital

Effective Sale (K + P)	$82.00 /sh
Profit vs Cost Basis	$16.47 /sh
Total Return vs Locked Capital	88.88%
Annualized CAGR (vs Locked Capital)	34.11%

Framework verdict: IREN fails the “buy near fair value” test at $65.53, but the capital extraction overlay:

anchors risk near or below your fair value (≈ $18.53/sh),
locks in a strong positive outcome if the contract is held to expiry, and
releases $4,700.00 of float on day one.

The hidden benefit — avoiding massive unrealized losses if price drifts back toward fair value — never shows up cleanly in simple CAGR charts, but is central to the framework’s risk management.

Float compounding on $4,700.00 released

The net premium kept on this IREN project — about $4,700.00 — functions as reusable float. While your locked capital works toward the effective sale around $82.00 per share, this cash can be redeployed into new CSP or extraction projects targeting 14–20%+ annual returns.

Monthly Rate	Future Value @ 26 mo	Float Gain
1.00%	$6,087.70	$1,387.70
1.50%	$6,921.73	$2,221.73
2.00%	$7,865.07	$3,165.07
3.00%	$10,135.98	$5,435.98

Key Numbers (Recap)

Symbol	IREN
Shares	100
Broker Cost Basis	$65.53 /sh
Fair Value (Your Estimate)	~$30.00 /sh
Locked Capital (Economic)	$18.53 /sh
Strike (K)	$35.00 /sh
Net Premium Kept	$47.00 /sh
Effective Sale (K + P)	$82.00 /sh
Current Price (Illustrative)	$40.00 /sh
Expiry	Jan 21, 2028 (26 months)

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Disclaimer: Educational illustration only; not investment advice. Options involve risk. Use margin and float prudently. Apply capital extraction only to businesses with clear fair value and high survival confidence to expiry.